"Standard & Poor's" downgraded Kuwait's credit rating despite its praise of the financial capabilities of state banks, to (AA-) due to lower oil prices and slow progress in reform, with a stable outlook, and expected to have a significant drop in oil prices in 2020 And 2021 because of the economic and financial negative impacts on Kuwait.
The agency also reduced Kuwait’s long-term rating to (AA-) from (AA), and considered that a trade-related shock would harm the Kuwaiti economy.
In turn, Fitch Ratings revealed that Kuwaiti banks are better able to recover than most of their counterparts in the Gulf Cooperation Council countries in the current crisis of falling oil prices and the effects of the Coronavirus.
However, "Fitch" considered that the recent sharp drop in oil prices will have adverse effects on Kuwait's public finances and debt path and will increase pressure on banks, indicating that interest rate cuts will damage the net margins of Kuwaiti banks. However, the agency considered that the Kuwaiti authorities could cover the country's financing and liquidity needs from public finance balances and possibly larger international bond issues.
Source (The New Arab Newspaper, Edited)
